Arkansas Gov. Asa Hutchinson kicked off the first Arkansas Manufacturing Innovation Summit on Wednesday by saying that strengthening the nation’s manufacturing was a “national security” issue, and strongly advocating that former felons should be given an opportunity to re-enter the workforce after leaving prison.

The state’s 46th governor made his remarks after being introduced by Dr. Tim Atkinson, president of the Arkansas Science & Technology Authority, as “the jobs governor.”

“That puts a lot of pressure on (me), but it also gives me a lot of focus,” Hutchinson told the overflow roomful of manufacturing managers and executives gathered at the two-day summit held at the Arkansas Regional Innovation Hub in North Little Rock.

“But as the jobs governor, now that the (legislative) session is over, it gives me the great opportunity to get back to the job of doing what I think is a very important part of being governor – and that is getting on the phone and recruiting industry to the state of Arkansas,” he said.

Arkansas’ manufacturing sector has taken a tumble in recent decades. Employment in the sector was 154,400 in March, down more than 37% from 246,900 in March 1995 – or a loss of 92,500 jobs in the past two decades. The last time the sector employed more than 200,000 was in August 2006.

In his enthusiastic speech to the business leaders, Hutchinson said although Arkansas’ manufacturing sector has run into difficult challenges over the last decade or so, now was the perfect time for Arkansas industry leaders to embrace innovation and take the lead in competing globally for better manufacturing jobs.

He then told a story of his recent conversation with an unnamed Arkansas employer who needed help from the state in upgrading his local manufacturing facility to run more efficiently, which also meant jobs would be cut because of better productivity.

He said such decisions are difficult to make as governor, but warned that local and state economic developers should help those employers find ways to innovate and improve efficiencies or Arkansas would fall even farther behind in the global competition for manufacturing jobs.

“There is great opportunity for bringing manufacturing back to the United States, and Arkansas should be in a position to capture more than its fair share of manufacturing (jobs),” Hutchinson said. “The biggest mistake would be not willing to make that sacrifice. That will put us in the position of being like Detroit.”

Hutchinson also reiterated two of his key visions for helping improve the standard of living for Arkansas’ working class through recently-passed tax cuts by the 90th General Assembly and by modernizing the Arkansas workforce with better technical skills.

He said the “middle-class” tax cuts passed during the legislative session was essential for workers making between $21,000 and $75,000 a year.

“That means something. You combine that $500 tax reduction with lower gas prices and many of our industries and retailers raising the level of pay – that means more expendable money for the average worker in the state of Arkansas.”

In something that has become a popular subject among manufacturing executives and industry leaders, Hutchinson spoke passionately about his goal of better aligning the state’s technical education programs with industry.

“What was out of line was that we had a lot of good work center programs, but they were not always aligned with industry effectively. And secondly, the state dollars were not flowing to the programs that work well,” the governor said. “The last legislative session, we aligned those programs with those priorities.”

Hutchinson also told the manufacturing leaders about legislation he was able to pass that could lead to 20% of Arkansas students eventually taking computer coding classes while in high school, a common refrain in his talks with the business and education community. He said that would put 6,000 computer coders each year into the Arkansas economy, preparing them better for study at one of the state’s four-year colleges or universities.

“I am not a fan of unfunded mandates,” the governor said jokingly, adding that the computer coding classes would be free to schools, “but if we reach that goal, that has the opportunity to change the economy of this state.”

Hutchinson said in May he would begin a “computer coding” tour to highlight the initiative at schools around Arkansas.

In closing, the governor told the group of more than 150 industry leaders that bringing back manufacturing lost to other countries is critical to the growth and future of Arkansas and the United States.

“We want to bring manufacturing back to the state of Arkansas, and keep it here and expand those opportunities. We realize it is a national security issue. We cannot be a service-driven industry in Arkansas and our nation exclusively,” said Hutchinson, former deputy director of the U.S. Homeland Security Department.

After his speech, the governor took a number of questions from the audience who enthusiastically embraced his appearance. One questioner asked the governor how he felt about the hiring of former felons back into the workforce. He encouraged the roomful of company executives to go back and look at their employee applications to see if any of the people they turned away happened to be someone who “checked the box” as a former felon.

“To say because they checked the box you won’t even consider them or give them an opportunity, I would encourage you to rethink that,” he said as several people in the audience stood up and applauded his response.

Following his speech, Hutchinson reiterated his stance and said his administrative team is working with lawmakers, correction officials, community advocates, nonprofits and industry leaders to make sure what was passed during the legislative session is successfully implemented.

He also plans to hold a “faith-based” summit later this year to get ideas from community and religious leaders on how to move this program forward.

“It takes a little bit of time and there is a little bit of work to be done there,” Hutchinson told Talk Business & Politics. “But I need to talk about it more. This has been a good reminder that I should be talking about it more.”

The city of Fort Smith has contracted with a Texas computer forensics firm to defend against an allegation that an officer or officers with the Fort Smith Police Department planted malicious software on the computer of Little Rock attorney Matt Campbell.

According to documents received by The City Wire following a Freedom of Information Act request, CyberEvidence, based in The Woodlands, Texas, was sent an external hard drive with a copy of computer documents from the computer that may have sent the software to Campbell. The Texas company was recommended by Adam Holland, a Wal-Mart Stores senior manager and lab director who works in forensic services for the global retailer.

According to the CyberEvidence website, the company provides digital forensics for international, federal, state, local law enforcement and the military. The company also provides incident response for corporations, and computer forensics education for universities teaching criminal justice and forensics.

“I wanted to do a quick email to get you in touch with Alvey. He works in the lab back at Fort Smith PD. They are searching for a forensics and malware expert to work a case where defense is alleging they planted malware to hack the attorney’s computer,” Holland noted in the email to Fort Smith Police Officer Alvey Matlock and Paul Brown, president and founder of CyberEvidence.

Brown also works as a police commander in Conroe, Texas, and is a more than 20-year veteran of the Houston Police Department.

The first contact between Alvey and Brown was made April 20. By April 21, working through attorney Doug Carson with the Fort Smith-based law firm of Daily & Woods, an external hard drive “containing a scan of (Capt.) Alan Haney’s work computer documents and the copy of Alan Haney’s 2012 and 2014 evidence files” was sent via FedEx to CyberEvidence.

THE ALLEGATION
Campbell has alleged in a lawsuit that an officer with the Fort Smith Police Department attempted to place “malicious software” on his law office computer. Campbell is the attorney representing former Fort Smith police officer Don Paul Bales in his lawsuit against the police department.

Bales was fired in October 2014 by the Fort Smith Police Department. He was accused of providing inside information about a police matter to Campbell, and lying in correspondence to a supervisor and to City Administrator Ray Gosack. His firing was upheld by the Fort Smith Civil Service Commission. Bales is also the leader of Take Back the Fort, a group attempting to raise enough signatures to call for an election changing the form of government in Fort Smith.

In a “Motion for Sanctions” action filed April 10, Campbell alleges that certain members of the FSPD “engaged in intentional spoliation of evidence,” provided emails with “improper redactions” and, in responding to a documents request, supplied Campbell with an external hard drive that “contained malicious software designed to hack into Plaintiffs’ counsel’s computer, rendering the hard drive unsafe for Plaintiffs’ use.”

The filing by Campbell includes an affidavit from Geoff Mueller, manager of information security at the Lower Colorado River Authority. Mueller said he found four “Trojans” designed to open Campbell’s computer up to outside control. The Trojans included a password stealer, malicious software installer and “control and command of infected computer,” according to Mueller’s report.

Mueller said his review of the hard drive and its contents indicated that the bad software “were not already on the external hard drive that was sent to Mr. Campbell, and were more likely placed in that folder intentionally with the goal of taking command of Mr. Campbell’s computer while also stealing passwords to his accounts.”

The city has declined comment on the issue.

CAMPBELL RESPONSE, COSTS
Campbell said the review of a scan of Haney’s computer does nothing to determine what is on the hard drive he received.

“I'm at a loss for just exactly what this is supposed to demonstrate. At best, it could show that there were not Trojans on the copy that Daily & Woods sent. That proves nothing in terms of the hard drive that was sent to me,” Campbell said in a statement sent to The City Wire. “After all, we have no proof that the second drive was made at the same time as the first drive, how it was made, etc., and we're talking about a police department that has admitted to destroying evidence during the course of this litigation. So, I suppose you'll have to forgive me if I'm not willing to take much of this $225/hr song and dance at face value.”

It is unclear from the documents how much the forensic work with cost the city. The “standard rate sheet” for CyberEvidence shows a $350 per hour charge for a master forensic examiner and a $225 charge for a forensic examiner. Expert testimony comes with a rate of $475 per hour, and a minimum initial retainer is $2,500.

One hour of “triage” on a device like a hard drive is $495 per device, with the eight-hour rate at $1,695 per device and 16 hours at $2,995 per device.

Documents received by The City Wire through the FOIA request also show that Fort Smith Police talked April 17 with Carson about how to respond to Campbell’s allegation. A principal action was removing Haney’s computer and placing it into evidence.

“That recommendation is being made as a safeguard to any additional allegations made by Matt Campbell and his clients,” Matlock noted in an e-mail to Carson, Police Chief Kevin Lindsey and several other police officers.

A Baldor marketing official told a roomful of manufacturing executives and leaders that although the use of robots is growing rapidly as part of the industrial giant’s operations, not one has ever replaced a human worker.

“Everybody thinks we use them to replace people,” said Chris Doyle, general product manager at Fort Smith-based Baldor Electric Co. “But we have not laid off one person because of a robot.”

Doyle was one of four members in a panel discussion on advanced manufacturing technology Wednesday at the Arkansas Manufacturing Innovation Summit in North Little Rock. Other members of the panel discussed manufacturing advances in 3-D printing, solar power and nanotechnology.

Doyle said Baldor, which is part of Switzerland-based industrial power and automation group ABB Ltd., said the key role robots play in the company’s manufacturing process is improving safety, productivity and quality costs. ABB acquired Baldor in an all-cash $4.2 billion deal — $63.50 per share — that closed in the first quarter of 2011.

He said Baldor’s electric motor division recently implemented robotics across most of its entire electric motor operations, which includes the 1,150-employee manufacturing plant in Fort Smith. At first, he said, there was trepidation among some employees who thought that the robots would take their jobs.

“It may have affected us on the hiring end, but we have not lost any employees because of this move,” Doyle said during his presentation at the two-day manufacturing summit.

Following the panel discussion, Doyle told Talk Business & Politics that robots are mainly used in the Fort Smith operations for “moving and lifting” heavy motor parts from one location to the next. To date, the company uses six robots at its facility that produces 500 electric motors each day.

“It has been a huge benefit to us for a variety of reasons,” Doyle said. “We are more efficient and safe, and our quality is a whole lot better because of robotics.”

Besides improving manufacturing efficiencies, safety and helping to control costs, Doyle said there were also some downsides the company has had to overcome when implementing robotics into the manufacturing process. He said it was difficult getting up to speed in some of the plant locations because they could not find the technical resources or people with the technical skills to operate them.

“We had a terribly hard time finding the right resources to implement robots at our plants,” he said, adding that Baldor now has a three to five-year strategy for implementing the company’s robotics programs.

Other panelists who also participated in the advanced manufacturing discussion included Geoff Shorts, manager of components at Central Moloney 3-D Print; Douglas Hutchings, CEO of Silicon Solar Solutions LLC; and James Phillips, Chairman and CEO of Fayetteville-based NanoMech.

Each panelist gave a 15-minute presentation of their company’s expertise, and explained how advanced manufacturing technology is changing their particular industry.

The U.S. Eighth Circuit Court of Appeals has delayed a decision on the constitutionality of Arkansas’ ban on same-sex marriage pending the outcome of a case before the U.S. Supreme Court. The federal high court on Tuesday heard arguments on the issue, and could issue an opinion by late June.

Approved by Arkansas voters in 2004, Amendment 83 banned gay marriage in the state.

In May 2014, Pulaski County Circuit Judge Chris Piazza ruled that Arkansas' ban on gay marriage was unconstitutional. Licenses were issued briefly in some counties across the state, but a stay was eventually issued halting same sex marriages in Arkansas while the case goes through the appeals process.

Following that, U.S. District Judge Kristine Baker ruled in November that the ban was unconstitutional, but  stayed her ruling allowing for an appeal.

“The Court declares that Arkansas’s marriage laws — Amendment 83 of the Arkansas Constitution and Arkansas Code Annotated §§ 9-11-107, 9-11-109, and 9-11-208 — violate the Due Process Clause and Equal Protection Clause of the Fourteenth Amendment to the United States Constitution by precluding same-sex couples from exercising their fundamental right to marry in Arkansas, by not recognizing valid same-sex marriages from other states, and by discriminating on the basis of gender,” Baker wrote in her 45-page decision.

Then Arkansas Attorney General Dustin McDaniel said Dec. 23 he would appeal a federal judge’s ruling that struck down Amendment 83, the state’s constitutional ban on same-sex marriage.

Arkansas Attorney General Leslie Rutledge said Wednesday (April 29) she was disappointed that the Eighth Circuit would delay a scheduled May 12 hearing in Omaha.

“I am disappointed by the Eighth Circuit’s decision not to hold oral argument in Arkansas's appeal in defense of the constitutionality of Arkansas Amendment 83. This case is important to the people of Arkansas, and the Eighth Circuit has the authority to rule regardless of what is occurring before the U.S. Supreme Court,” Rutledge said in a statement.

Gov. Asa Hutchinson recently appointed three special justices to the state’s Supreme Court to hear the related case involving same-sex marriage in Arkansas. Hutchinson named Brett Watson of Searcy, as Special Associate Justice to the Arkansas Supreme Court to replace Chief Justice Jim Hannah, who has disqualified himself from the case.
Judge Betty Dickey of Heber Springs will replace Justice Rhonda Wood and Judge Shawn Womack of Mountain Home will replace Justice Paul Danielson. Wood and Danielson also recused from the case.

U.S. SUPREME COURT HEARING
A more than two hour hearing was held Tuesday (April 28) by the U.S. Supreme Court Justices on what is titled the “Obergefell v. Hodges” case. It is a combination of challenges to gay marriage bans in Kentucky, Michigan, Ohio and Tennessee.

Those opposing the bans won their case in a lower court. However, a myriad of appeals court decisions have pushed the issue up to the U.S. Supreme Court.

According to a report from NPR, the Supreme Court has often ruled that marriage is a fundamental right a state cannot restrict without real justification. It has said that prisoners have the right to marry, and so do people too poor to make child support payments. In 1967, the court struck down state bans on interracial marriage.

John Bursch, the lawyer arguing on behalf of the states to retain gay marriage bans, said promoting families is a “legitimate interest” in Michigan’s right to ban gay marriage.

"Michigan has a legitimate interest in encouraging opposite-sex couples to enter into permanent, exclusive unions within which to have and raise children," Bursch argued. "Having that diversity of both the mother and a father can be a good thing for children.”

Justice Ruth Bader Ginsburg, 82, asked Bursch the following question after his argument that heterosexual marriage was to ensure a stable relationship for procreation.

“Suppose a couple, 70-year-old couple, comes in and they want to get married? ... You don’t have to ask them any questions. You know they are not going to have any children.”

She also said changing the definition does nothing to weaken the “rights” of heterosexual marriage.

“All of the incentives, all of the benefits that marriage affords would still be available,” Ginsburg said. “So you’re not taking away anything from heterosexual couples. They would have the very same incentive to marry, all the benefits that come with marriage that they do now.”

Justice Anthony Kennedy, who is considered a moderate and possible swing vote on the issue, said during the hearing he was not sure the issue was for the high court to decide.

“This definition has been with us for millennia, and I think it's very difficult for this court to say, ‘Oh well, we know better,’" Kennedy said according to a Reuters report.

According to Reuters, four justices were favorable toward ruling against bans on gay marriage, with Chief Justice John Roberts and Justice Antonin Scalia appearing to support a state’s right to define marriage.

Gay marriage is legal in 36 states.

Empty shelves are an ongoing problem at Wal-Mart Stores and other retailers. It frustrates customers and results in negative headlines and social media posts. Wal-Mart and other retailers are making big investments of time and money to fix the problem, but supply chain analysts say solutions will not come easy.

Wal-Mart has acknowledged problems with on-shelf availability and back-room clutter, and management continues to work on these challenges which exist up and down the supply chain. Introducing products like SPARC, which allows for more back room access from third party merchandisers who work to ensure products get on the store shelf from the back room, is one of many strategies Wal-Mart is using to stem the problem.

While the back-room clutter is a problem, it’s just part of a bigger issue, according to supply chain experts. Dan Sanker, CEO of Fayetteville-based CaseStack, a third party logistics firm, said on-shelf availability issues have become have worse in recent years. Unwinding the reality won’t happen fast or easy, he said.

“Since Wal-Mart has made a conscious effort to bring on more small suppliers and add back items to the stores after Project Impact (a program that reduced store items), the supply chain has become more complicated,” Sanker said.

CaseStack works with small to medium size suppliers conducting consolidation and warehousing services. He applauds Wal-Mart’s efforts to bring on more unique products because that’s something consumers have come to expect. Sanker said consumers want more product choices and retailers are clamoring to deliver. However, what consumers might not realize is that smaller suppliers may not have the wherewithal to carry sufficient inventory reserves and store them across the supply chain near all the stores where product is sold. 

Annibal Sodero, supply chain expert at the University of Arkansas, refers to this inventory as “safety stocks.” He said suppliers have the best efficiencies when they disperse adequate levels of inventory or safety stocks the closest to the consumer. In Wal-Mart’s case that would be in the distribution center network across the country. He said it is cheaper for suppliers to hold the product further upstream (away from the point of sale), but there is a trade-off in terms of service to customers. He said more smaller suppliers with niche and regional products do complicate Wal-Mart’s supply chain. 

Sanker said too many times he’s seen suppliers who rely on co-packers and outsourced manufacturing have to wait their turn for the product run which can be days or weeks. If the shelf is empty and there is no product to ship until the next batch is run, then it’s going to stay empty for a while. He said this perhaps could be eliminated if suppliers using consolidation services would carry adequate safety stock inventory.

Sodero said large suppliers don’t typically have this issue because they manufacture their own products in multiple locations. They also have the ability to store their products upstream and then feed the Wal-Mart distribution centers as orders are generated.

Sanker said his company facilitates those smaller suppliers with warehousing and tracking of sales in addition to the logistics involved in getting them to the correct distribution centers where orders are generated. But more suppliers lately have been looking to shave costs and some are opting out of those services. 

“When some of the shelves are empty it means there is no product in the pipeline to ship. But consumers often blame the retailer when in reality the suppliers are not carrying enough inventory to meet demand are also at fault,” Sanker said.

REPLENISHMENT CHALLENGES
Another part of the on-shelf issue Wal-Mart is working to improve deals with a new replenishment system referred to as Global Replenish System, or GRS. 

Wal-Mart’s team challenged with trouble-shooting replenishment and on-the-shelf issues recently spoke in Bentonville to suppliers. Debbie Hodges, vice president of supply chain services, told suppliers that her team is challenged with taking a look at the retailer’s entire network — looking for additional capability, hunting efficiencies.

One of the initiatives underway is known as “DC Pooling” which Wal-Mart said 36 suppliers are doing at this time. This is a result of Wal-Mart’s conversion to the new GRS software. Insiders said DC Pooling is not new, and is merely consolidating freight into full truck loads which is a cheaper and more efficient way to move freight.

Once a supplier can get on “DC Pooling,” Hodges said they will move more freight in full truck loads which means fewer touches and cost savings. Wal-Mart said suppliers and carriers will have five days of visibility (product tracking) for load information using GRS. This compares to one day on the Inforem system. 

Sanker said moving more freight in full truck loads makes sense for retailers because in CaseStack’s own tracking of the best less-than-truckload (LTL) carriers the arrive-by-date percentages are at best 85%, which is not enough for the 98% Wal-Mart expects from suppliers.

Experts said DC Pooling is not a complete solution because it’s only being used in general merchandise for freight collect orders generated through the retailer’s replenishment system.

Wal-Mart is using analytical algorithms which are run daily to determine the most efficient routes for products coming down the supply chain. Such analysis includes a close look at the retailer’s entire network, which includes:
• 42 Regional distribution centers;
• 42 Full-line grocery high velocity distribution centers;
• 7 Fashion distribution centers and a smaller footwear distribution facility in Fort Smith;
• 11 Import distribution centers;
• 28 Specialty distribution centers, e-commerce, optical, pharmacy, returns, tires, etc.; and
• 10 Center-Park distribution centers for consolidating freight.

The average one-way travel distance between the stores and the distribution center is 134 miles, according to MWPWL International.

SMALLER STORE ISSUES
Sodero said as Wal-Mart continues to add more smaller stores, the square footage in the back room is limited. This makes storing product further up the supply chain a necessity. He said the on-shelf issues are problematic for all retailers and especially those who have built a reputation as a one-stop shop.

Wal-Mart has been slow to roll out GRS and fully replace Inforem which was created by IBM and last updated in 2007. The two systems are opposites and incompatible. Inforum uses an upward forecast modeling system, while GRS uses a downward forecasting model.

Jami Dennis, a private consultant to small and medium size suppliers, said replenishment is one area where she finds many suppliers have concerns. She said the primary issue is that suppliers often don’t understand their ownership of the process.

“Many do not know who their replenishment manager is and/or have limited communications with them. The don’t know that they should be watching store-specific activity and making recommendations. We advise suppliers to ask for a minimum of a quarterly call and in some cases (if there are issues) weekly strategy calls,” Dennis has told The City Wire.

Besides a supplier getting their foot in the door, understanding the complexities of the replenishment process is one of the biggest hurdles many will face, according to Dennis.

“A sales team may sell an item into Wal-Mart but the replenishment team has to sell it for the remainder of that item’s life span. Suppliers could be missing out on hundreds of thousands to even millions of dollars in missed shipments yearly because of a simple lack of knowledge about the different functions and tools that are available to better promote and manage items,” Dennis said.

The March jobs reports for the Fort Smith metro shows a year-over-year gain in employment, but the regional employment has struggled to gain and maintain momentum in the previous five years. The number of jobs during March was almost 12,000 fewer than a pre-recession peak.

Fort Smith’s metro jobless rate was 5.8% in March, down from 6% in February, and lower than the 6.7% in March 2014, according to figures from the U.S. Bureau of Labor Statistics. March’s data is subject to revision, and a massive revision of historical employment data for all U.S. metro areas was posted April 22.

The number of employed in the Fort Smith region totaled 113,464 in March, down slightly from 113,523 in February, but better than the 110,353 employed in March 2014. The number of employed in the metro area is down 9.5% compared to the revised high of 125,426 in June 2006 – or 11,962 fewer jobs than the peak metro employment.

Following are the revised Fort Smith metro annual employment averages and jobless rate during the previous five years. (A lengthier jobless rate history is at the end of this report.)
2014: 111,588, 6.2%
2013: 111,277, 8%
2012: 113,821, 8.1%
2011: 114,160, 8.8%
2010: 115,923, 8.5%

The Fort Smith annual employment average in 2006, the year before the recession, was 122,993.

The size of the Fort Smith regional workforce during March was 120,392, down from 120,797 during February, but better than the 118,287 during March 2014. The labor force reached a revised high of 132,004 in June 2007, meaning the March workforce size is down 10.5% from the peak number.

All of the eight metro areas in or connected to Arkansas had jobless rate declines in March compared to March 2014, and all had jobless rate declines compared to February. During March, the lowest metro jobless rate in the state was 4.2% in Northwest Arkansas and the highest rate was 7.6% in the Pine Bluff area.

FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 6,928 during March, down from the 7,274 during February, and below the 7,934 during March 2014.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 22,800 in March, unchanged compared to February, and below the 23,100 during March 2014. Employment in the sector reached a high of 24,700 in December 2007.

The Fort Smith area manufacturing sector employed an estimated 18,100 in March, unchanged from February, and above the 17,900 in March 2014. Sector employment is down 34.6% from a decade ago when March 2005 manufacturing employment in the metro area stood at 27,700. Annual average monthly employment in manufacturing has fallen from 27,900 in 2005, 20,700 in 2010, and to 18,100 in 2014.

Employment in the region’s tourism industry was 8,700 during March, unchanged from February and below the 9,000 in March 2014. The sector reached an employment high of 9,300 in May and June of 2014. Annual average employment of 9,100 in 2014 was a new record for the metro sector.

In Education & Health Services, employment was 16,100 during March, up from 16,000 in February and below the 16,400 during March 2014. Employment in the sector reached a record 16,700 in October and December of 2012.

In the Government sector, employment was 18,100 during March, unchanged from February and down compared to 18,300 in March 2014.

NATIONAL NUMBERS
Unemployment rates were lower in March than a year earlier in 358 of the 372 metropolitan areas, higher in 28 areas, and unchanged in one area, noted the broad BLS report.

The U.S. unemployment rate in March was 5.5%, unchanged compared to February and down from 6.6% from a year earlier. Arkansas’ jobless rate was 5.6% in March, unchanged from February and down from 6.4% in March 2014.

Oklahoma’s jobless rate during March was 3.9%, unchanged from February, and down compared to 4.8% in March 2014. The Missouri jobless rate during March was 5.6%, up from 5.5% in February and below the 6.4% in March 2014.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
March 2015: 4.2%
Feb. 2015: 4.4%
March 2014: 5%

Fort Smith
March 2015: 5.8%
Feb. 2015: 6%
March 2014: 6.7%

Hot Springs
March 2015: 6%
Feb. 2015: 6.2%
March 2014: 6.8%

Jonesboro
March 2015: 5.2%
Feb. 2015: 5.4%
March 2014: 6.3%

Little Rock-North Little Rock-Conway
March 2015: 5.1%
Feb. 2015: 5.3%
March 2014: 5.8%

Memphis-West Memphis
March 2015: 6.5%
Feb. 2015: 7%
March 2014: 7.9%

Pine Bluff
March 2015: 7.6%
Feb. 2015: 7.9%
March 2014: 9.2%

Texarkana
March 2015: 5.2%
Feb. 2015: 5.5%
March 2014: 6.77%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2014: 6.2
2013: 8%
2012: 8.1%
2011: 8.8%
2010: 8.5%
2009: 8.3%
2008: 5.1%
2007: 5.2%
2006: 4.8%
2005: 4.6%
2004: 5.2%
2003: 5.6%
2002: 5%
2001: 4.4%
2000: 3.7%

Retailers are poised to profit handsomely in the coming days as consumers are expected to dole out $21.2 billion for dear Mom and the national holiday in her honor slated for May 10.

American families are expected to spend an average of $172.63 on mom this year, which is up almost $10 from spending last year, according to the National Retail Federation and Prosper Insights & Analytics 2015 survey. This year’s spending estimates are the highest recorded in the survey’s 12-year history.

“We’re encouraged by the positive shift we’ve seen in spending on discretionary and gift items from consumers so far this year, certainly boding well for retailers across all spectrums who are planning to promote Mother’s Day specials, including home improvement, jewelry, apparel and other specialty retailers as well as restaurants,” NRF President and CEO Matthew Shay said in a report. 

The report also shows increased spending intentions are even between those earning less than $50,000 annually and those earning more. About 17.8% of respondents earning less than $50,000 annually said they will spend more this year, compared to 17.5% of those respondents earning more.

Younger millennials (ages 18 to 24) are the largest cohort (43.7%) intending to spend more on mom this year. Older millennials (ages 25 to 33) were the second largest cohort (31.9%) with higher spending plans.

The majority of consumers (80%) will pick up a greeting card for mom this year which is expected to total $786 million. Discounters like Wal-Mart, Dollar General and Target will get a lion’s share of the greeting card sales which are why these retailers prominently display the cards near the front door this time of year.

Flowers are another favorite gift for Mother’s Day as 67.2% of consumers will spend $2.4 billion on flower bouquets this year. National grocers like Kroger and Aldi as well as regional players like Harp’s are promoting Mother’s Day gifts near their front doors with colorful potted plants such as tulips, roses, hibiscus and lilies. Wal-Mart, Lowe’s, Home Depot and other big box retailers are also hawking lower prices on annuals and perennials just in time for Mother’s Day. This competitive category is expected to take a toll on traditional florists as the survey respondents did not mention florists as a place they will shop for Mother’s Day.

Department stores are hoping to cash in as 36% of shoppers also plan on gifting apparel and clothing items to the tune of $1.9 billion, up from $1.7 billion last year. Jewelry stores are also poised to benefit from bigger spending this year. The survey found one in three consumers will purchase jewelry for their mom for a cumulative spend of $4.3 billion, this is up from $3.6 billion last year.

Another special way to treat mom is to take her out to lunch, which is what half of consumers plan to do this Mother’s Day. The survey indicates families will spend $3.8 billion on a special brunch or similar activities.

Consumers also want to help their moms with new electronics with plans to spend $1.8 billion on items like smartphones, tablets and e-readers. Spa days and personal services are also favorite gifts for about one in five respondents who will spend $1.5 billion this year, according to the survey.

An informal survey by The City Wire found most mom’s are happy just to spend time with their kids saying that’s gift enough.

“Time with my kids is far more precious than any gift. They usually take me out to lunch and give me a gift card which they know I like,” said Peggy Knight of Rogers. Kathleen Campanirio of Port Charlotte, Fla, agreed, saying that seeing her two sons which live in Massachusetts is the “best present” she can hope for.

Clint Lazenby, a retail expert with #GetOnShelf in Bentonville, said Mother’s Day spending is not just a U.S. tradition. 

“In many parts of Latin America more money is spent on Mother's Day than Christmas,” Lazenby said.

Experts say there are no set rules around the holiday.

“Mother’s Day is extremely unique and personal for millions of consumers, and families this year will look for different ways to enjoy their time with mom,” said Prosper’s 
Principal Analyst Pam Goodfellow. “While some will splurge, others will search high and low for the perfect, practical gift, knowing that she likes any gift that comes from the heart.”

Lana Flowers of Rogers, already received a wonderful gift from her daughter Lauren last week — $50,000 in annual scholarships to the University of Denver. While technically the gift was earned by her daughter Flowers said, “Now I can sleep instead of lying awake worrying about paying for college.”

In a response filed Monday (April 27), the city of Fort Smith countered allegations that Fort Smith police attempted to infect the computer of a Little Rock attorney. The 11-page retort said harmful computer software “is exceedingly commonplace,” and questioned why the attorney took almost 10 months to make the allegation.

Little Rock attorney Matt Campbell has alleged in a lawsuit that an officer with the Fort Smith Police Department attempted to place “malicious software” on his law office computer. Campbell is the attorney representing former Fort Smith police officer Don Paul Bales in his lawsuit against the police department.

In a “Motion for Sanctions” action filed April 10, Campbell alleges that certain members of the FSPD “engaged in intentional spoliation of evidence,” provided emails with “improper redactions” and, in responding to a documents request, supplied Campbell with an external hard drive that “contained malicious software designed to hack into Plaintiffs’ counsel’s computer, rendering the hard drive unsafe for Plaintiffs’ use.”

The filing by Campbell includes an affidavit from Geoff Mueller, manager of information security at the Lower Colorado River Authority. Mueller said he found four “Trojans” designed to open Campbell’s computer up to outside control. The Trojans included a password stealer, malicious software installer and “control and command of infected computer,” according to Mueller’s report.

Mueller said his review of the hard drive and its contents indicated that the bad software “were not already on the external hard drive that was sent to Mr. Campbell, and were more likely placed in that folder intentionally with the goal of taking command of Mr. Campbell’s computer while also stealing passwords to his accounts.”

The city recently contracted with CyberEvidence, a computer forensics firm based in Texas, to defend against the malicious software allegation.

FORT SMITH RESPONSE
Filed in Sebastian County Circuit Court, the response from attorney Doug Carson, with the city’s legal firm Daily & Woods, said Campbell’s motion “contains no showing beyond vague and conclusory allegations that there was some kind of act by some unspecified person acting in some unspecified manner. ... Clearly, Plaintiffs’ vague allegations are without merit and should be denied.”

Carson also said any bad software on a hard drive sent to Campbell was unintentional.

“Malicious computer software such as Trojans or other malware is exceedingly commonplace. It is also possible that the device became infected after it was delivered to Plaintiffs’ counsel,” Carson noted in the response.

He also questions why Campbell never “raised any issue concerning this allegedly ‘infected’ external hard drive” from when it was sent in June 2014 to when Campbell’s allegation surfaced on April 10, 2015.

Carson also notes that during a meeting on Aug. 28, 2014, Campbell used his cell phone to review data from the alleged infected hard drive. An affidavit by Alvey Matlock, senior network administrator with the Fort Smith Police Department, Matlock wrote that during the meeting “it was clear to me that he (Campbell) and in fact accessed, made copies, and moved that data to Internet-based cloud storage of his copy of the external hard drive” prior to the meeting.

Matlock also said the manner in which the bad software may have been placed on the hard drive “cannot be verified” without an independent examination of the hard drive that Campbell still possesses.

The response also pushes back against Campbell’s claims that the city has not provided all the information requested.

“Plaintiffs have been furnished more than 10,000 pages of Fort Smith Police Department (“FSPD”) documents, have been furnished video recordings, and have been given those documents in the format their attorney requested.”

Link here for a PDF of Carson’s response.

CAMPBELL RESPONSE
Campbell told The City Wire on Thursday (April 30) that indeed it did take more than nine months to formally respond. However, he said some of that time was first spent working with a forensics expert – Geoff Mueller – to determine the scope of the problem. After that, about three months was spent in a process that included working with Sebastian County Prosecuting Attorney Dan Shue on a possible investigation. It was October when Campbell was informed the Arkansas State Police declined to investigate the software allegation.

Campbell said there also were other procedural efforts and reviews of possible routes of investigation.

“It takes time,” Campbell said, adding that he wanted to be careful about making such an allegation.

Also, Campbell said during the Aug. 28, 2014, meeting, he was using his cell phone to access “screen shots” of data sent him by Mueller.

“Those were images he sent. ... I was not accessing that (hard driver),” Campbell said.

As for what Campbell plans to do with the hard drive, he said that will be answered in a response he plans to file next week.

While Avian Influenza dominated headlines and packer margins ran in the red in recent weeks they are not expected to put a dent in Tyson Foods’ profits. The company is set to report fiscal second quarter earnings on Monday (May 4), before the equity markets open.

The Springdale-based meat giant is expected to pocket between $292 million and $299 million in net income for the quarter ending March 31, according Wall Street analysts. These profits compare to $213 million earned in the year-ago period. The net income per share is expected to be 72 cents, up from 60 cents reported a year ago.

Combined revenues from Tyson and Hillshire Brands are expected to top $10.11 billion, up 11.9% over the $9.03 billion reported by Tyson Foods last year ahead of the merger. Tyson acquired Hillshire in an $8.5 billion deal completed in August 2014.

Shareholders of Tyson Foods have not fared so well this year with the stock price down about 1% to date. Shares of Tyson Foods closed Thursday (April 30) at $39.50, up 29 cents. The high price for the stock over the last 52-weeks is $44, and the low of $34.90 was reached June 16, 2014.

Wall Street analysts do see some upside potential in the meat company with a one-year target price of $50.25.

BIG CHICKEN
Tyson Foods chicken segment is expected to post good results despite softness in export markets relating to recent outbreaks of Avian Influenza. Analysts say despite some challenges, the overall pricing for chicken has been strong in recent months thanks to consumer demand.

Pilgrim’s Pride, a major competitor to Tyson Foods, reported earnings on Thursday (April 30) of 82 cents a share, rallying from 39 cents a year ago. Pilgrim’s CEO Bill Lovette told the media the chicken industry is running at almost full capacity and can barely stay up with demand.

The sale of Tyson’s Mexican poultry operation to Pilgrim’s has not been completed as the companies await a final decision from Mexican antitrust authorities. The company expect the deal will close in the next quarter.

Some of the issues helping support chicken prices include limited supply given an older age breeding flock and heightened food-service and consumer demand as chicken remains a value compared to beef and pork.

Stable corn and soybean prices are also helping boost margin spreads for chicken processors. Tyson expects feed costs to be $400 million less this year than last.

The U.S. Department of Agriculture has reported chicken production is growing slightly ahead of its forecasted projections, not by number of head, but by overall weights. There are more larger birds in production than smaller birds, but the industry is working to increase the smaller bird production which is now running at full capacity.

Credit Suisse analyst Robert Moskow said Tyson expects its chicken margin to be 11% for the duration of this year with solid profits in the second quarter, and building higher through the summer months.

LEANER BEEF
In the beef segment, Tyson Foods is expected to report weaker results than a year ago given that packer margins have been up and down dramatically in recent months. Tyson has held back slaughter as demand is tepid across the board for beef.

In the first quarter of 2015, which corresponds with Tyson Foods’ second quarter, beef prices increased by 13.48% and per capita consumption increased slightly (0.01%) compared to 2014 levels, according to analysts with Kansas State University.

Looking ahead, beef processing margins have improved significantly since late March. If wholesale prices start to stabilize and retail demand becomes more evident, as it should seasonally, greater packer appetite of a larger serving of feedlot cattle could easily be triggered, according to DTN livestock analyst John Harington.

PORK AND PREPARED FOODS
Tyson is expected to report decent pork results despite near negative margins off and on throughout the quarter. Analysts said Tyson runs aN efficient pork business with mostly branded products that carry higher margins. Tyson said its pork margins for the quarter should range between 6% and 8%.

The pork segment will no doubt be helped by the presence of Hillshire Brands as will the Prepared Foods segment which is smallest of the four segments at Tyson Foods.

Moskow said Tyson expects the operating margin for this combined business to be "in excess of 6%." In fiscal 2015 the company expects to realize more than $225 million of synergies from the acquisition.

He said Tyson believes the improved portfolio and innovation will partially offset increased raw material input costs. Moskow forecast a 6.5% margin for the Prepared Food segment. He said raw material costs are expected to be $140 million in the recent quarter, which could weigh down net profits a bit. Moskow believes Tyson will make up some ground in the back half of the year in this segment.

Gov. Asa Hutchinson signed an executive order Thursday (April 30) to create the Governor’s Working Group on Highway Funding, he told a group while speaking at the Arkansas Trucking Association’s Annual Business Conference and Vendor Showcase in Hot Springs.

The working group’s purpose is to involve the public in determining highway financing options. According to the order, the working group will make recommendations by Dec. 15.

The 20-member group will include the director or designee of the Highway Department, a member of the Arkansas State Highway Commission, designees from the Arkansas State Chamber of Commerce, the Arkansas Economic Development Commission, the Arkansas State Department of Higher Education, and others.

Hutchinson pledged to create the working group during the legislative session after the House Committee on Public Transportation voted to advance a bill that would transfer money out of the general fund to highways. Hutchinson opposed the bill but said he would create the working group, so the sponsor, Rep. Dan Douglas, R-Bentonville, pulled the bill. Douglas will be a member of the working group.

The order said the appointments would be made within six weeks of the order, which was dated April 23. Hutchinson later told reporters he planned to make the appointments by Monday.

REVENUE PROBLEM, TAX ISSUES
Hutchinson told the truckers’ group that solutions are needed because increasingly fuel-efficient vehicles are resulting in declining gasoline tax revenues. The federal fuel tax has not increased since 1993, and the state tax has remained the same since 2001.

Hutchinson said afterwards that he was not planning a special session on highways.

“We could wait until the next meeting of the General Assembly in regular fashion two years from now, or there might be an opportunity in between. We’ll just have to wait and see,” he told reporters.

Hutchinson said the working group needs a wide range of representatives from interests that receive funding from the general revenue budget, such as higher education, in order to reach a consensus. He said a model could be designed that would have no impact on the budget now but would find dollars in growth revenues in the future.

“I understand the conservative environment in which we live, and the fact that the taxpayers just had a half-cent sales tax for highway development,” he said, referring to the Connecting Arkansas Program passed by the voters in 2012.

FEDERAL FUNDING UNCERTAINTY
Hutchinson’s executive order comes one month before Congress’ highway bill, MAP-21, is due to expire, and the federal Highway Trust Fund that reimburses Arkansas for much of its highway construction is nearly out of money. Chris Spear, the American Trucking Associations’ vice president of legislative affairs, earlier told the truckers group that Congress will not be able to write a transportation bill in time and will have to create a short-term fix to buy time to write a long-term bill. If it doesn’t do so before the end of the year, a long-term bill might not happen until the end of 2017 because next year is an election year, he said.

The uncertainty caused by Congress’ inability to write a highway bill has already caused the Highway Department to cancel 60 projects totaling $162 million this year, AHTD Director Scott Bennett told attendees. Counting that amount, about $490 million is potentially at risk this year and about that same amount next year.

“I’m really, really happy that he took this step,” Bennett said about the executive order in an interview. “I think it shows a lot of leadership on his part, and it shows that he really does recognize what the problem is, and he wants to make a difference.”

Oil prices will return to $70 a barrel by the end of the year as American production declines and inventories are drawn down, Oklahoma oilman and natural gas supporter T. Boone Pickens predicted Thursday (April 30) during a question-and-answer session at the Arkansas Trucking Association’s Annual Business Conference and Vendor Showcase in Hot Springs.

Pickens said the United States is now largely energy independent counting its 125-year supply of natural gas and its shared oil market with Canada and Mexico. Because of new drilling techniques, the United States has increased daily oil production from 4 million barrels to 9.4 million barrels, collapsing the oil price and making the United States the swing producer – and not Saudi Arabia, which is not cutting production.

But the lower oil prices have caused the number of domestic rigs in operation to be cut in half since December, and domestic inventories have reached their highest levels ever and are about to be drawn down, he said. Production is declining. As a result, oil will be $70 per barrel by the end of the year. Pickens, who is nearly 87, predicted oil prices will reach $150 per barrel in his lifetime.

Pickens made his remarks as part of a sit-down interview with Craig Harper, J.B. Hunt executive vice president and chief operating officer and ATA chairman of the board.

Pickens told Harper he remembers climbing up a sign to change the prices at a gas station as a boy in Holdenville, Okla. At its lowest, gasoline was 11.9 cents per gallon while diesel was 6 cents.

Pickens has been evangelizing for natural gas since 1988 because it’s cheaper and cleaner than oil and available abundantly domestically. He self-funded a marketing campaign, the Pickens Plan, to encourage the end of American dependence on foreign oil.

But natural gas has struggled to gain a foothold in the American transportation market. Despite the lower fuel prices, motor carriers have stuck with diesel because of the lack of a fueling infrastructure, the increased costs of natural gas vehicles, the decreased power, and carriers’ reluctance to change.

But Pickens remains optimistic about natural gas’ future. The price will remain low long after diesel prices have increased. He said the rest of the world is far behind the United States in its ability to develop natural gas as a transportation fuel. Natural gas has become the fuel of choice for waste haulers because their fleets stay close to home fueling stations. Major carriers like UPS and FedEx are making major investments in the fuel.

“To me, the fuel of the future is going to be natural gas, not diesel,” he said.

Pickens offered views on a variety of other topics.

He criticized President Obama for vetoing the Keystone Pipeline and said the administration appeared headed toward making a bad deal with Iran, though he didn’t think Iran would be able to affect global oil prices much.

He said he had never voted for a Democrat for president and predicted that Hillary Clinton will not be elected. He said the United States should create a North American energy alliance with Canada and Mexico.

Pickens said he has no plans on retiring (“I’m only 87”) and advised against anyone doing so if they are productive and enjoying their job. He made most of his money after age 68, when he left the company he founded, Mesa Petroleum, got a divorce and started the BP Capital investment firm. After that, his net worth increased from $39 million to $5 billion. He said he has paid $665 million in taxes and donated $1 billion to various charities.

A gathering of 90 businesses and organizations based or active in the Fort Smith metro area participated Friday (May 1) in the “Path To Progress,” a business expo and job fair hosted by the Fort Smith Regional Chamber of Commerce.

O.K. Foods was the presenting sponsor of the event.

The day began with a First Friday Breakfast address by Mike Malone, CEO of the Northwest Arkansas Council. Malone spoke about the socio-economic benefits of the Razorback Regional Greenway, a 36-mile multi-used paved trail system that connects Bentonville, Fayetteville, Johnson, Lowell, Rogers and Springdale. It provides access to major destinations including schools, shopping centers, hospitals, parks, churches, and the University of Arkansas.

A grand opening of the more than $30 million project is set for Saturday (May 2), with Northwest Arkansas officials and others from around the state expected to attend a day of events associated with the trail.

Malone’s speech was part of a theme with the expo that began at 8:30 a.m. after the First Friday Breakfast concluded. The expo exhibit area at the Fort Smith Convention Center included several signs promoting a “Yes” vote for trail funding in Fort Smith.

The Fort Smith Board of Directors approved Jan. 20 a May 12 election in which city voters will be asked to vote for renewal of the 1% sales tax for street, bridges and drainage improvements. Part of the ballot will also include a voter question on directing 5% of the tax collections toward the multi-use trail system. A Trails & Greenway Committee developed the plan that seeks to add 35 miles to the city’s trail system. The Fort Smith Regional Chamber of Commerce and the Fort Smith Regional Council have endorsed renewal of the tax and the 5% portion for trails and greenways.

The chamber on April 27 issued an endorsement for renewal of the street tax and the 5% for trail development.

“A connected multi-use trails system will help attract and retain skilled employees and companies while expanding the use of simple, clean transportation. Additionally, trails will improve the overall quality of life in the community by promoting a healthy lifestyle and offer low-cost recreational activities for residents,” the chamber noted in its statement.

A group opposing the 5% plan, Save Our Streets Fort Smith, argues that the city is not now able to keep up with street maintenance, and further dilution of the funding will result in long-term infrastructure problems.

Residents of Northwest Arkansas celebrated Saturday alongside federal, state and local officials as the ribbon was cut shortly after noon to mark the official opening of the Razorback Greenway, a 36-mile paved multi-use trail extending from Bella Vista to the south side of Fayetteville.

As the ribbon was cut, a group of about 80 Springdale School District  students were the first to ride through the opening in ceremonial style. Residents have been using the trail as parts of it were opened over the past few months.

Grand opening events were held earlier in the day in Fayetteville, Rogers and Bentonville. The trail connects the three cities plus Springdale, as well as Lowell and Johnson. It provides access to destinations such as schools, shopping centers, hospitals, parks, churches and the University of Arkansas.

The Greenway is billed as an alternative transportation route as well as a venue for physical activity.

“This is a great day, a great region. This opens up the region. We can all walk or ride the trail  now matter how diverse we are. Our diversity is our strength,” said Fayetteville Mayor Lioneld Jordan.

Rogers Mayor Greg Hines said the completion of the trail “marks a level of cooperation and collaboration unmatched anywhere in the country. This is awesome.”

That was the theme of several of the short speeches during the hour-long ceremony at Shiloh Square in downtown Springdale as bicyclists rode providing a backdrop for speakers, such as Karen Minkel, a director for the Walton Family Foundation which provided major funding for the construction, and Pete Jilek, with the Federal Highway Commission, which also provided grant funding for the project.

Other speakers during the event included Highway Commissioner Dick Trammell of Rogers; Mike Malone, director of the Northwest Arkansas Council; Chuck Flink, of ALTA Planning and Design, who paid tribute to the 129 landowners who leased land for the trail project; and Chris Wyrick of the University of Arkansas who led the audience in the Hog Call.

Other dignitaries in the audience of nearly 1,000, included former Highway Commissioner Bobby Hopper, Springdale philanthropist Walter Turnbow, along with representatives from Gov. Asa Hutchinson and the Congressional delegation.

Andy Clarke, president of the League of American Bicyclists of Washington D.C., said the trail would be a model for the entire country as other regions look for examples of government and local cooperation to build similar projects.

“This project is just the start of the profound impact it will have on the region,” Clarke said. “Change happens when something like this is built.”

After his remarks, Clarke said he rode a bike Saturday morning from Bentonville and planned to return by bike, calling the trip “amazing.” Before he took off on his bicycle, Clarke stood among the spectators who were milling around, saying this is what it will look like a year from now.”

John McLarty of the Northwest Arkansas Regional Planning Commission said his staff logged some 5,000 hours on the project in the last four years. “This is an incredible dream come true.”

Quoting 2010 U.S. Census figures, McLarty said 76,000 people live within one-half mile of the trail and some 80,000 work within one-half mile of the trail. Bentonville Mayor Bob McCaslin said thinking of all that the Greenway has done for his city, he is reminded of the word “give” as an anachronym for "generosity, investment, vision, everyone.”

Springdale Mayor Doug Sprouse praised the trail as it travels alongside Spring Creek through the heart of downtown, saying “The Greenway is the catalyst we needed for the revitalization of downtown Springdale.”

It was the riders who cycled south from Fayetteville and south from Bentonville who made the day. Dave and Dorothy Owens started their 30-mile round trip journey from Dickson Street in Fayetteville, noting the trail provides scenic views along the way. They bought a home in Fayetteville when they moved from Nebraska near the trail to go the Fayetteville Farmers Market and other errands on the bikes.

Robert and Chassie Kirby of Springdale traveled to Bentonville for breakfast before returning to attend the ribbon cutting. Bruce Kirby said they would use the trail often for trips throughout the region  to shop or dine out in the different cities. The most scenic part of the trail are from downtown Springdale to the Silent Grove area on the city’s northwest side and an area from Locomotion to Clear Creek in Fayetteville, Kirby said.

“We don’t get in the car much anymore,” said his wife, Chassie.

David and Glenda Wolfe said they left Bentonville in a group of about 30 cyclists, stopping at Mercy Hospital for an opening ceremony there and picked up another 30 to 35 riders for the trip on to Springdale.

“It’s a pretty trail,” Wolfe said.

The trail represents an investment in excess of $30 million in Northwest Arkansas. The Walton Family Foundation donated $15 million and another $15 million was obtained through the Transportation Investment Generating Economic Recovery grant from the Federal Highway Administration.

Activities throughout the day were planned in each of the cities as well as the Arkansas and Missouri Railroad providing train rides from Fayetteville to Springdale. Jordan was among 100 or more (and their bikes) who rode the first train out of Fayetteville Saturday morning, calling it “great.”

It was Lowell Mayor Eldon Long who perhaps summed up the day’s activities and the access the trail provides to the entire region.

“W-O-W, wow is all I can think of,” Long said. “Where else can you ride your bike right up to the podium.”

Organizers of the inaugural Steel Horse Rally were hoping for at least 5,000 motorcycle riders the first year. The early estimate suggests they may have doubled that number.

“We’ve looked a drone footage and worked with the police (on an estimate) ... and we’re thinking we had between 8,000 and 10,000 bikes,” said Dennis Snow, president of Steel Horse Rally Inc. “Even on the low side, it proves that this area was really ready for something like this.”

There were an estimated 1,000 motorcycles and other vehicls that participated in the “Thunder Through The Valley” parade – a key feature of the overall event held in downtown Fort Smith on May 1-2. The parade began Saturday afternoon at Fort Smith Park and traveled to in downtown Fort Smith. More than 10 minutes elapsed between the first motorcycle leaving the park and the last. Capt. Kirk Redwine of the Fort Smith Police Department estimated that up to 2,000 people were at Fort Smith Park to help kick off the parade.

“Awesome.” That’s what David Hester of Van Buren said Saturday afternoon just after he parked his motorcycle in the middle of Garrison Avenue when asked what he thought about the Steel Horse Rally. “So far it’s really been a great event for us ... and that’s good because this is just their first year.”

Hester and his wife, Brittany, were part of the more than 15,000 people – a high estimate was 20,000 – to attend the the two-day rally that included live music at Harry E. Kelley Park, many food and product vendors, and thousands of motorcycles stretched along Garrison Avenue between 6th and 10th Streets.

Event organizers and backers say the rally could grow to be one of the largest motorcycle rallies in a several state region. They have noted that the large and successful Bikes, Blues and BBQ rally in Northwest Arkansas had modest beginnings.

The event was geared toward honoring members of the military, veterans, police and firefighters and first responders. The rally also helps local charities including the Gregory Kistler Treatment Center, The Arkansas Veterans Home, The Fort Smith Museum of History and the Darby Legacy Project.

“Awesome” was a word Snow said he heard many times during the weekend. The event had a few small glitches, but nothing big, which was a relief to Snow and his wife Karen. The pair were the leadership team for the event. Some of the “hiccups” were good, Snow said. For example, more vendors showed up than anticipated.

“This was a whole lot better than I thought it would be for the first year. The perfect weather definitely helped. Mother Nature is obviously a biker,” Snow said Sunday.

Riders came from more than 15 states, including the northeastern tip of Maine, Idaho and Ohio. At least one biker was from Canada, Snow said.

Snow said the more than 200 volunteers were a big reason for the event’s first year success.

“The volunteers, oh my goodness, I can’t tell you how great they were. They were the fuel for the whole rally,” Snow said.

Snow also credited the city of Fort Smith for its support.

“The Fort Smith Police Department was absolutely incredible. They made everybody, all the bikers, all the visitors and our vendors, just everybody, feel welcome. They had such a great attitude about the whole thing. And it wasn’t just the police. Every city department was so supportive of this. There was never ever any dissension. To me it was a prime example of everyone in the city working together,” Snow said.

The police reported three arrests Friday night, but none of those were bikers.

“You never know what to expect when you get this many people in one place ... but I’d say it’s been a good crowd so far,” Redwine said Saturday afternoon,

(Michael Tilley, a co-owner of The City Wire, is on the Steel Horse Board of Directors.)

First quarter net income of $745,000 for Fort Smith-based ArcBest was well below what the market expected, but it was the company’s first first-quarter profit for the first time in seven years and a wide swing from the first quarter 2014 loss of $5.19 million.

Quarterly revenue for ArcBest, a transportation holding company with less-than-truckload carrier ABF Freight as its largest subsidiary, was $613.276 million, up 6.1% compared to the first quarter of 2014.

The net income of 3 cents per share was below the consensus estimate of 10 cents per share. Also, first quarter revenue was below the consensus estimate of $621.27 million.

A pension settlement charge of $684,000 was incurred in the first quarter, which shaved 3 cents per share from net income.

First quarter earnings did not carry the momentum from a strong fourth quarter and full year 2014. ArcBest reported in February full year net income of $46.177 million, up 192% compared to the $15.811 million in 2013, and a wide swing from the $7.7 million loss in 2012. Fourth quarter net income was $14.543 million, up 40.5% compared to the same quarter of 2013.

ArcBest CEO Judy McReynolds said in the earnings report issued early Monday (May 4) that productivity and pricing helped end the streak of first-quarter losses.

"We were very gratified to see ArcBest post a first-quarter profit for the first time in seven years," McReynolds noted in the statement. "As productivity and pricing improved, ABF Freight reversed last year's first-quarter losses while maintaining its focus on better serving customers. The emerging businesses contributed their largest revenue portion yet to ArcBest, at 29 percent of total consolidated revenue, as our efforts to provide tailored, customized solutions across the supply chain are resonating well."

ABF Freight, the company’s largest segment, posted first quarter revenue of $441.207 million, just above the $428.871 million in the 2014 quarter.

Key measurements in the segment were mixed. Billed revenue per hundredweight was $28.06, up 3.7% and the number of shipments was up 4.9%. However, tonnage shipped during the quarter was down 1.3%.

ArcBest did see first quarter improvements with respect to growing its non-asset (non-trucking) business revenue. In total, the company’s four non-trucking subsidiaries – Premium, FleetNet, ABF Logistics, and ABF Moving – generated $183.7 million in quarterly revenue, or 29% of the company’s total revenue. That was up from $158.4 million in the 2014 first quarter, which was then 27% of the company’s revenue.

The first quarter non-asset revenue was below the 34% of total revenue for all of 2014.

Premium Logistics (Panther), the company’s largest non-asset segment, posted first quarter revenue of $75.292 million, better than the $72.226 million in the first quarter of 2014. However, operating income in the segment fell to $1.195 million compared to $3.364 million in the first quarter of 2014.

“The quarter's results were impacted by unfavorable experience in casualty claims and higher than expected healthcare costs, which in total increased Panther's operating costs versus the same period last year by $1.5 million,” the company noted in the earnings report. “Finally, costs associated with investments in additional sales personnel and infrastructure for future business growth also reduced first quarter 2015 profitability.” 

SEGMENT OPERATING INCOME– First Quarter 2015
ABF Freight
Q1 2015: $43,000
Q1 2014: –$12,184 million

Premium Logistics (Panther)
Q1 2015: $1.195 million
Q1 2014: $3.364 million

FleetNet (maintenance services)
Q1 2015: $1.17 million
Q1 2014: $1.401 million

ABF Logistics
Q1 2015: $775,000
Q1 2014: $535,000

ABF Moving
Q1 2015: –$363,000
Q1 2014: –$841,000

ArcBest shares (NASDAQ: ARCB) closed Friday at $35.70. During the past 52 weeks the share price ranged from a $47.52 high to a $30.14 low.

Tyson Foods is making good on its claim that the $8.5 billion acquisition of Hillshire Brands in August 2014 would boost top and bottom lines. The Springdale-based company reported Monday (May 4) that fiscal second quarter earnings were up 45.5% and earnings in the first half of the fiscal year are up 32.5% compared to the same periods in 2014.

Second quarter net income of $310 million was better than what market watchers expected. The per share earnings of 75 cents was better than the consensus estimate of 72 cents per share.

Total revenue in the second quarter was $9.979 billion, better than that $9.032 billion in the same quarter of 2014, but slightly below the consensus estimate of $10.11 billion.

"This was another great quarter and better than we initially expected," Donnie Smith, president and CEO of Tyson Foods, said in the earnings report. "Our fiscal second quarter is seasonally challenging, but we came in above our projections due to strong performances by our Prepared Foods and Chicken segments.”

Net income for the first six months of the fiscal year reached $619 million, well ahead of the $467 million during the same period in the previous fiscal year. Revenue for the six months was $20.796 billion, up compared to the $17.793 billion in the fiscal 2014 six months.

The chicken and prepared foods segment – where most of the Hillshire Brands business is now reported – have been the stars for Tyson Foods. For the first half of the fiscal year, operating income for poultry was $683 million compared to $487 million in the same period of the 2014 fiscal year. Prepared foods posted first half operating income of $268 million, a big increase compared to the $37 million in the same period in 2014.

Revenue in the prepared food segment also provides a clear example of the Hillshire impact. The prepared foods segment hit $4.004 billion in sales during the first six months of the fiscal year, more than 126% than the $1.768 billion during the comparable fiscal 2014 period.

Smith said the company is ahead of its goal to gain value out of the Hillshire deal.

“The acquisition of Hillshire Brands has played an important role in Tyson Foods' transformation, and we are very pleased with the progress of the integration and synergy capture, achieving $77 million in synergies in the second quarter,” Smith noted in the earnings report. “Because we are ahead of pace in reaching our stated target of more than $225 million in fiscal 2015, we are raising our synergy target to more than $250 million for this year, $400 million in 2016 and $600 million in annual synergies by the end of fiscal 2017.”

As expected, Tyson Foods’ beef segment posted a $20 million operating loss during the second quarter, and has a $26 million operating loss for the first six months of the fiscal year. Operating income in the first half of fiscal 2014 was $93 million.

Operating income decreased as we were not fully able to pass along increased inputs from higher fed cattle costs, in part due to the seasonal reduction in beef demand as well as the relative value of competing proteins, in addition to increased operating costs.

REPORT HIGHLIGHTS
• Operating income in the chicken segment increased due to improved sales and lower feed costs which decreased $75 million and $185 million during the second quarter and first six months of fiscal 2015, respectively.

• Operating income in the prepared food segment improved due to an increase in sales volume and average sales price from Hillshire Brands products. Also, the company reported lower raw material costs of approximately $40 million and $30 million for the second quarter and first six months of fiscal 2015, respectively.

• Sales volume in the pork segment decreased because of the sale Heinold Hog Markets business in the first quarter of fiscal 2015. Excluding the impact of that sales, sales volume grew 3.2% and 2.4% for the second quarter and first six months of fiscal 2015, respectively, driven by better pork demand.

• Sales volume in the international segment declined because of the sale of the company’s Brazil operation during the first quarter of fiscal 2015, and weak demand in China. Average sales price decreased due to supply imbalances associated with weak demand in China and currency devaluation in Mexico.

• The company expects fiscal 2015 sales to reach $41 billion based on gains in the chicken and prepared food segments.

Shares of Tyson Foods (NYSE: TSN) closed Friday at $39.50. During the past 52 weeks the share price has ranged from a $44 high to a $34.90 low.

The City Wire will update this story later today.

Changes continue at Walmart U.S. with CEO Greg Foran shaking up the status quo as part of a larger effort to streamline the reporting bureaucracy and improve store sales.

On Friday (May 1)  Foran and his chief operating officer Judith McKenna announced major shifts in personnel which include Mike Moore, who has been over the Neighborhood Market stores for just 11 months. Moore will move from his leadership over 613 Neighborhood Markets to the new executive vice president for more than 3,400 supercenter locations across the U.S. 

Last year Moore assembled an oversight team for the growing Neighborhood Market division which had previously run under the supercenter management. Moore felt this growing format needed its own team of executives which he assembled in July of 2014. 

With Moore stepping away from the Neighborhood Market team, Julie Murphy, who was the former executive vice president over Wal-Mart’s western division, will now assume those duties over small formats.

Moore previously oversaw for almost four years all operations in Wal-Mart’s central division. Prior to that he spent a year as senior vice president over the retailer’s general merchandise division. Moore joined Wal-Mart in 2005 and spent five years as a senior vice president over the western division.

The personnel change was not the only issue discussed in the internal memo sent by Foran and McKenna to Wal-Mart U.S. employees on Friday. In keeping with Foran’s game plan to simplify processes, the retailer eliminated an executive level which formerly supervised the West and East divisions of the company. 

With Murphy leaving her duties over the West to takeover Neighborhood Markets, Joaquin Gonzales Varela who held the similar post over the Eastern division has left the company. Rather than promote leaders up to those vacancies Foran opted to eliminate that level of oversight. The entire U.S. operation will now report directly to McKenna. 

This closely resembles what Foran did with the merchandising division a few months ago. All merchandising now reports directly to him. 

Retail analyst Walter Loeb, president of Loeb Associates, said direct reporting will allow for more initiatives and flexibility in the company. 

“It is a good move for the future growth of the divisions. I believe that it is likely that more innovative ideals will be tested with the elimination of the intermediary layer created by having a management level overseeing the two geographic divisions. I also believe that the company is returning to its heritage and empowers its store management to respond to local demands,” Loeb notes in a Forbes blog. 

Following are other announced personnel moves this year.
• Pam Kohn, executive vice president of Walmart Realty, left the company. 

• J.P. Suarez, promoted to executive vice president of Walmart Realty, will report to McKenna

• John Aden, executive vice president of innovation, left the company.

• Greg Hall, senior vice president of hardlines was named senior vice president of entertainment at Walmart U.S., reporting to Andy Barron. (Hardlines include home furnishings, electronics, jewelry, and sports equipment.)

• Terry Price was hired to assume senior vice president of hardlines.

• Jane Ewing, senior vice president, will lead “Next Generation Stock-up” team.

• Jeff McAllister, senior vice president, will lead “Next Generation Supply Chain” team.

• Latriece Watkins, senior buyer for snacks and beverages, will lead “Ways of Working” team.

• Jack Sinclair, senior vice president for Walmart U.S. Grocery, left the company March. 20.

• Tony Airoso, became senior vice president of global food sourcing. He is based in California.

• Chuck Tilmon, became vice president of fresh charter initiatives, which focuses on improved performance in fresh merchandise.

• Scott Neal assumed the new role of meat czar, a position created under Foran.

• Shawn Baldwin became senior vice president of fresh foods, a job also created by Foran.

• Jack Pestello became senior vice president of private brands, a job also created by Foran.

Arkansas tax collections are up $172 million during the first 10 months of the fiscal year. That 3.3% gain over the same period in the previous fiscal year comes courtesy of slightly better than expected income tax revenue and smaller tax refunds.

Gross revenue between July 2014 and April was $5.379 billion, up 3.3% compared to the same period in the previous fiscal year. The amount is also 2.5% above the budget forecast, according to the report issued Monday (May 4) by the Arkansas Department of Finance and Administration.

Individual income tax collections for the first 10 months of the fiscal year totaled $2.71 billion, up 3.4% from last year and 1.8% above the budget forecast. Year-to-date sales and use tax collections were $1.849 billion, up 2.1% compared to last year and 1% above the budget forecast. Income taxes and the sales and use tax collections are the two primary sources of state revenue.

Year-to-date income tax refunds total $460.8 million, which is up 2% compared to last year but 3% below the forecast.

Corporate income tax revenue for the first 10 months is $404.1 million, up 10.1% compared to the same period in the previous fiscal year, and up 16.8% over the budget forecast.

STRONG APRIL COLLECTIONS
Revenue reported in the April report was $80.2 million, up 7.6% compared compared to April 2014, and up 10.1% above the forecast.

“Results in April, the largest collection month of the year, were above forecast in all major categories of gross collections. In addition, refunds in both Individual and Corporate Income tax were less than expected,” according to John Shelnutt, head of the Department of Finance and Administration’s Economic (DFA) Analysis & Tax Research division. “Individual Income tax collections contributed $41.9 million above forecast in April, as tax filings with payments grew by double-digit amounts compared to the prior year. The gain was partly offset by a decrease in Withholding tax, reflecting the shifts in payroll withholding rates identified in recent months.”

Individual income tax revenue in April was $510.1 million, up 9.3% compared to April 2014 and up 8.9% over the budget forecast. Sales and use tax revenue during the month was $190 million, up 4% and up 3% over the budget forecast.

Shelnutt said the sales and use tax gain was “part of a rebound effect from weather-related declines in the prior month.”

OTHER TAX COLLECTIONS
Alcoholic beverage
July 2014 - April 2015: $43.1 million
July 2013 - April 2014: $41.9 million

Games of skill
July 2014 - April 2015: $38.2 million
July 2013 - April 2014: $32.5 million

Tobacco
July 2014 - April 2015: $182 million
July 2013 - April 2014: $181.7 million

Insurance
July 2014 - April 2015: $67.4 million
July 2013 - April 2014: $67.3 million

COLLECTIONS HISTORY

Tax collections during fiscal year 2014 (July 2013-June 2014) totaled $6.242 billion, up 0.5% above the previous fiscal year and up just 0.2% compared to budget estimates. The year marked the fourth consecutive year of revenue increases. The fiscal year ended with a budget surplus of $78.7 million.

Tax collections during fiscal year 2013 (January 2012-January 2013) totaled $6.214 billion, up 4.9% above the previous fiscal year and up 2.5% compared to budget estimates. One result of the gains was a budget surplus of $299.5 million.

Arkansas tax collections reversed a negative two-year slide in the 2011 fiscal year, with collections up 4.5% in the January 2010-January 2011 period. State tax collections for fiscal year 2011 totaled $5.673 billion, up 4.5% above the $5.43 billion in the 2010 period.

The biggest declines in the 2009 and 2010 fiscal years were with individual income tax collections and sales and use tax collections.

A teen center, Veteran’s job fair, connecting area youth with senior citizens and building a baseball field for children with disabilities were the four presentations made Monday (May 4) by University of Arkansas at Fort Smith students in the community leadership program.

Rusty Myers, who is retired from the Western Arkansas Planning and Development District, and Fort Smith businessman Fred Williams served as professors for the spring class. The four presentations were made in front of about 35 regional business and civic leaders and UAFS faculty. Each group had 10 minutes to present.

Myers said the class has “no tests, no textbook and no lectures.” He said the real challenge is that the students are challenged to address a community need in the semester period, when in reality such change “can be a matter of years.”

“It’s (the class) really centered around the students really driving themselves,” Myers said. “Our only mandate is that they move the needle on an issue.”

The students were tasked to identify a problem, develop a strategic plan to address the problem, and then engage the plan.

Williams praised the students after the presentations, saying they are “outstanding young leaders.”

“If you notice, they were all thinking of others,” Williams said of the four groups and their projects.

THE BRIDGE OF GENERATIONS
Zac Houston, Jacob James, Josh James and Michael Mars worked on a project to reconnect area senior citizens with the youth community. Houston said too often in America senior citizens are shuffled off to institutions. He said the problem with this is that young people are walled off from senior citizens and their years of experience and wisdom.

After a few early miscues, the group connected with Jim Medley, president of Fort Smith-based Area Agency on Aging. Houston said Medley met with the group for three hours and “helped make connections possible” to reach their goal.

The plan now is to connect those who use the agency’s senior citizen centers with UAFS students. Some of the ideas include having UAFS students participate with senior citizens in many of the center’s weekly activities. To sustain the program, Houston said the UAFS Student Activities Office will coordinate with Area Agency on Aging.

Houston said the partnership can “show the senior population that we’re here, we care about you, and you’re an asset to the community.”

BUILDING A BETTER COMMUNITY
The second group have a vision to build a baseball field for children with disabilities, because they believe “every kid deserves to the chance to play baseball, to be part of a team.”

Their research connected with them with Conyers, Ga.-based The Miracle League which now specializes in creating a unique baseball field that caters to the special needs of disabled children.

Students in this group are Kendall Beller, Manila Bounthanthy, Jordan Cordray, Rebecca Dayberry, Austin Duerr, Karina Garcia, Maggie Phrachanpheng, Kevin Tran and Krystal Ziegenbein.

According to the group, there is a The Miracle League field in Little Rock and Springdale. But with more than 3,000 disabled children in the Fort Smith metro area, the group said a field is needed here. They’ve received support from Sebastian County with a location at Ben Geren Regional Park. Other companies have offer free or discounted services, and they’ve reduced the cost from around $450,000 to $150,000.

The UAFS athletic department has committed to providing student-athletes to volunteer at the facility and with the children. However, the group has not yet identified a more full-time individual or group to help manage the the facility. But they are working to seek grants, and hope to see the field become a reality.

TEEN CENTER
Another group believes the region must provide more resources to teens in the area. Not only do activities and programs keep teens and pre-teens out of trouble, but they also help nurture young minds and hopefully create future leaders, the group noted.

Group members are Dawn Birth, Dirk Diment, Jordan Erz, Kevin Mirzaei, Leneé Nastav, and Ngan Tran.

The group partnered with the Fort Smith Boys & Girls Club because they believe an active teen center – partially modeled after the Jones Center in Springdale – would help area youth gain “critical skills for work, college and beyond.” Such a center, the group said, would help counter the challenges of teen pregnancy, substance abuse, teen depression and too many teens unsupervised at home.

Activities and programs at the proposed center could include learning new language, self defense, financial management, cooking, and “strategic” games like chess and backgammon. A poll of 87 area teenagers showed that 73 said such a center “would benefit their life.”

It’s an aggressive plan, and the group laid out four phases – to include evaluation, funding and sustainability – to make the project happen.

VETERAN’S RESOURCE AND JOB FAIR
UAFS students Mark Couch, Thomas Marrazzo and David Payton believe more can be done in the area to connect veterans with housing and employment resources.

There are more than 10,175 veterans living in Sebastian County. But the more interesting number, according to this group, is that 25% of area homeless are veterans. To address that percentage, the group decided to learn what resources were available. They found many groups offering services, but there was not an event or avenue to bring the resources, employers and veterans together at one time and one place.

After spending several weeks calling hundreds of area businesses and organizations, this group launched the Veteran’s Job & Resource Fair which will be held May 20 in the Reynolds Room at the University of Arkansas at Fort Smith. To date, 21 area companies and five veteran service groups have signed up to attend. First National Bank of Fort Smith is providing lunch, and Arvest Bank is providing nice bags in which vets may carry materials.

Marrazzo said part of the group’s goal is to “promote Fort Smith as a city that cares about its vets.”

The Student Veterans Organization at UAFS will help sustain the fair in future years.

First quarter net income for Van Buren-based USA Truck was $1.116 million, a big improvement over the $1.589 million loss in the first quarter of 2014, and the 10th consecutive quarter in which the once-troubled trucking firm improved its financial performance.

Total revenue in the quarter reached $132.887 million, down 8.6% compared to the $145.489 million in the first quarter of 2014. Most of the revenue decline was the result of a more than $10 million reduction in fuel surcharge revenue brought about by lower diesel fuel prices.

The first quarter report follows a financial turnaround in 2014. Net income in all of 2014 was $6.033 million, a more than $15 million swing from the $9.11 million loss in 2014. The swing ended five consecutive years of losses. Prior to 2014, the company would post five consecutive years of losses that totaled almost $48 million – wiping out the $45.76 million in net income earned between 2001 and 2008.

“We extended our track record to 10 consecutive quarters of year-over-year financial improvement and turned in a profitable first quarter for the first time since 2007. This quarter’s results reflect positive contributions from both our Trucking segment and our SCS segment, once again demonstrating the benefits of USA Truck’s integrated service offerings,” Interim Chief Operating Officer Thomas Glaser said in the earnings report.

It was announced April 6 that CEO John Simone is on indefinite leave to battle a “serious medical condition.”

A big help in the quarter was the swing on expenses from lower fuel prices and ongoing equipment upgrades and route changes that created a 4.8% improvement in miles per gallon. The fuel expense for the quarter was $17.978 million, well below the $33.003 million in the 2014 quarter.

Operating income in the company’s trucking division was $600,000 in the quarter, better than the operating loss of $6.1 million in the first quarter of 2014. Revenue per active truck exceeded $3,000 for the fifth straight quarter, with an 8.15% rate increase per loaded mile. Revenue per seated tractor was $3,190, better than the $3,027 in the first quarter of 2014.

However, the top line and bottom line numbers in the segment were held back by an inability of the company to hire enough drivers to handle the demand.

“Overall freight volume for the quarter was impacted by a lower seated truck count, reflecting the ongoing industry driver shortage. To support asset utilization during the quarter, we accelerated plans to dispose of older tractors. Additionally, we expect to implement a significant increase in driver pay on June 1,” Glaser said in the report.

The company reported an average of 1,988 seated tractors – truck with drivers – in teh quarter, down from a 2,061 average during the first quarter of 2014.

Despite the challenges, the company’s trucking segment operating ratio was 99.2, compared to 107.6 in the first quarter of 2014. The ratio, a key metric in the trucking industry, shows that the company spent 99.2 cents for every dollar it earned.

Operating income in USA Truck’s growing Strategic Capacity Solutions – a logistics and brokerage business – was $2.976 million in the quarter, down from $5.077 million in the 2014 quarter. Revenue during the quarter for SCS was $38.671 million, below the $45.252 million in the 2014 quarter.

“Revenue was impacted by the softer spot market during the first quarter of 2015, compared to the uniquely strong spot market created by the harsh winter weather in the prior year,” the company noted.

USA Truck execs have said growth in the SCS segment is important to diversifying the revenue stream. The SCS revenue was 29.1% of total company revenue in the first quarter, down slightly from 29.7% in all of 2014, and better than the 24.6% in 2013.

And according to the company’s report, it is moving toward reducing its debt load by $11.3 million in the quarter.

“We also realized a $13.9 million increase in cash flow from operations, reflecting improved profitability, working capital management and enhanced operational effectiveness. We believe our sustainable profitability, combined with approximately $100 million of available borrowing capacity under our revolving line of credit at March 31, afford us significant financial flexibility as we execute on our strategy,” noted Chief Financial Officer Michael Borrows.

Shares of USA Truck (NASDAQ: USAK) closed Monday at $25.41. During the past 52 weeks the share price has ranged from a $32.14 high to a $13.90 low.